HomeTop StoriesRabo: The World Is Banking On China (But Japan Points To Our Future)

March 15, 2019

Rabo: The World Is Banking On China (But Japan Points To Our Future)

Authored by Michael Every via Rabobank,

Market comments

There is a saying in the market that if you want to see the future of monetary policy, you just have to look at Japan. Well, as expected, BoJ Governor Kuroda and his team decided to keep policy unchanged, despite a fresh downward adjustment of its economic assessment. Two out of the nine board members dissented, with one of them being very outspoken in favour of more easing, thus underlining the dovish slant. But, like in Europe, headwinds are mostly blowing from the external environment, leading to weaker exports and industrial output – according to the Bank. In essence, the Japanese economy is feeling the hurt from slower global growth as a result of Brexit, protectionism and the slowdown in China.

And apparently Japanese monetary policy makers still have some hope the economy can recover from this downdraft pretty quickly or that any ongoing weakness would be offset by a better domestic economy. But when many central banks are thinking like that, you can be sure it won’t add up! Or are we all banking on the Chinese now? Well, at least Mr. Draghi and Mr. Kuroda seem to be on the same page, with Kuroda saying this morning that “China’s stimulus is pretty big and will have an impact”.

Even more worrisome is that refraining from action whilst keeping up a brave face perhaps only highlights that the central bank has ran out of options. Despite being arguably the most aggressive central bank in terms of monetary easing since 2008, underlying inflation’s basically gone nowhere (inflation ex-food and energy being at a paltry 0.4% y/y). And while there is an increasing chorus –recently joined by finance minister Taro Aso– to lower or make more flexible the BoJ’s 2% inflation target, Mr. Kuroda confirmed this morning that this is not (yet) the way to go.

In that sense, Japan may still show where our future lies, but from the latest outcome of the BoJ’s deliberations one would rather think there is hardly any future at all.

At the very least, the BoJ’s headaches (as well as those of many other central bankers) may stay for some time to come. First of all, US President Trump does not plan to meet with China’s Xi at least until next month. While Trump had already stated that he isn’t in any rush to make a deal, delay of these talks suggest that there are still ‘some’ differences to be ironed out first. Moreover, President Trump noted that he expects a conclusion “one way or the other” by then, suggesting that if the two sides haven’t managed to bridge the gap, Trump may still follow up on his threat of increasing US import tariffs.

For China, this means that tariffs remain in place for the time being. And while the government may have taken some steps to mitigate the damage, Chinese data is showing signs of economic hurt. After the annual congress, Premier Li said that downward pressures on the economy persist, but added that the government will not let growth fall below a “reasonable range”. China has reserved tools to address any further uncertainties that may surface, if this proves to be necessary. Further tweaks to the reserve requirements and interest rates are possible if the economy continues to slow ahead, but don’t expect the PBOC to resort to Chinese Quantitative Easing in the near term: Premier Li warned against “flood-like” stimulus, which may have long-term side effects.

And if you think this is all the stuff that’s causing headaches, may we just point out that Mr. Trump –who, by the way, just got dealt a blow by the Senate over his border wall emergency– may well look for other ways to get his approval ratings back up by talking tough to its other trade partners, in particular the EU. Mr. Trump used Irish PM Leo Varadkar’s visit to the White House yesterday as a stage to express his frustrations with Brexit and Europe. He warned that that“if [the EU] don’t talk to us, we’re going to do something pretty severe economically. We’re going to tariff a lot of their products coming in because the European Union treats us very, very unfriendly.”

Oh, and, according to Bloomberg, the North Koreans apparently are contemplating whether to maintain their moratorium on missile launches and nuclear tests after the disappointing meeting between President Trump and Kim Jong Un.

We’d figure that is already enough for the market to chew on and we will not close this Global Daily with usual “Happy Friday”, because it isn’t. Our hearts and minds are with the victims of the Christchurch shootings.

Day ahead

On the European data front we have the final release for Eurozone inflation. But much more interesting are industrial production, the Empire State Manufacturing index and the University of Michigan consumer sentiment survey from the US. In particular the latter two are for March, thus giving a relatively timely snapshot of economic sentiment in the wake of the US government shutdown. Both the Empire State index and the Michigan survey were surprisingly weak in January but then showed a modest rebound in February, so with the consensus looking for both indicators to show further improvement in March it is basically saying that the US economy is still going pretty strong and that the recent dip was likely transitory. This is also expected to be reflected in growing industrial production in February. Hence a failure of today’s US data to show such improvement could potentially throw such beliefs into doubt.

If you like small government……

Political correctness is….

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If you think it’s a good idea to……

The Kuhner Report – Podcasts:

Isn’t there a better way to vote?

by Witsnews

Voter fraud is on the rise, the same politicians keep getting elected over & over & over again….and we wonder why nothing ever gets done in Washington. One has to wonder how much of an influence voter fraud and the illegal vote has had on our current political state in this country.

Isn’t it time to change the way we vote, so that our votes actually count, instead of being effectively nullified by voter fraud?

Here are a few suggestions:

Every state should start requiring photo ID and proof of citizenship from every voter. (no-brainer)

Hand stamping procedures or similar tools for verifying one vote per person should be implemented in all states.

Early voting by mail, and absentee voting should be strictly limited to only those cases where legitimate need is proven. “Ballot harvesting”, a favorite among Democrats in California which allows anyone to collect absentee ballots unsupervised, should be outlawed.

Voting machines:

Any state using electronic voting machines should require that the machines provide multiple copy paper receipts showing a date/time stamp, voting location, machine ID number, and list all the candidate choices the voter selected.

One copy remains with the voter who initials all the receipts to verify that the information on the receipts is correct, and one copy goes to a representative of each political party.

After the electronic votes are all tabulated, staff from each political party represented in the election proceed to hand count each and every voter receipt while being monitored by reps from each of the parties. The totals from the hand counts are then compared to the results of the machine tabulations, and all results are immediately released to the public.

If the winners from the machine tabulations match those found from the hand counts from all political parties, then an official winner is declared.

If there is a discrepancy from the hand counts of any of the political parties large enough to show a different winner than what the electronic tabulations showed, then an equal number of staff from all parties represented must combine to do an additional final manual re-count.

The results of this final count determine the official winner. If the electronic tabulations are overruled by the results of the hand counts, all voting machines involved in the process are repaired or replaced immediately.

This is just a short list. There are many other options which should be considered such as increased use of security cameras, volunteer programs to provide proper oversight, legal aid for filing fraud reports, etc.

The future of the republic is at stake here, we have to get this right…and soon.

Socialism is….

When the Muslims Came….

Before:

and After:

When the Muslim refugees came, I didn’t protest….they were just poor refugees.

When they built mosques and Islamic cultural centers, I didn’t protest….they had the right to pray to Allah.

When they demanded only Halal food in schools, I didn’t protest….they can only eat what the Koran allows them to eat.

When they gang-raped women and girls, I didn’t protest…..rapes occur in every culture, and they have nothing to do with Islam.

When they carried out terror attacks, I didn’t protest….it was only a few extremists, who didn’t represent true Islam.

When they demanded Sharia Law zones, I didn’t protest….they needed their own space, and we live in a free country.

When they took their seats in government, I didn’t protest…..they have a right to be represented.

When they introduced Islamic Sharia Law, demanding that it apply to the entire population…….it was too late for me to protest.

The duty of a true Patriot….

Meet the U.S. Congress….

Feminists say….

Do you really want to know?

Worth The Short Read:

“America, The Last Man Standing”

JFK’s Words of Wisdom

Lutheran Minister Richard Wurmbrand On The Threat To Freedom

Russian Novelist And Historian Alexander Solzhenitsyn Cautioned The U.S.

Theodore Roosevelt’s Thoughts On Civilization, America, & The Future

It’s been over seven years. Do you realize that 300 tons of radioactive water from Fukushima is still being pumped into the Pacific Ocean every day? The ocean is dying. Why hasn’t there been more of an international effort to help Japan contain this disaster?

FARMLANDS – Documentary About The Plight Of South African Farmers – by Lauren Southern

Bill Cooper 9/11 Broadcast As It Happened – Maybe The Only Real Truth That Was Heard That Day:

Still believe that two aluminum planes took down three steel skyscrapers in perfect demolition-style free fall, and turned the buildings and their contents into dust…without the assistance of some other type of destructive force? – Where Did The Towers Go? – by Dr. Judy Wood – Hardcover

Follow WITSNEWS On Twitter

In case you were wondering what your country might be like without 2nd Amendment rights, just look at history. Support the NRA – https://home.nra.org/

Slavery, Terrorism & Islam – by Dr. Peter Hammond – Paperback

Western Civilization is
under a full frontal
assault, and the leftists
are the ones holding
the door wide open to
their own demise!

Islam is not a religion,
nor is it a cult. Islam
has religious, legal,
political, economic and
military components.

Islamization occurs when
there are sufficient Muslims
in a country to agitate for
their so-called “religious rights”.

When politically correct and
culturally diverse societies
agree to “reasonable” Muslim
demands for their “religious
rights”, they also get
the other components under
the table.

Here’s how it works:

As long as the Muslim
population remains around 1%
of any given country, they
will be regarded as a
peace-loving minority and
not as a threat to anyone.
In fact, they may be
featured in articles and
films, and stereotyped for
their colorful uniqueness:

From 5% on, they exercise
an inordinate influence in
proportion to their percentage
of the population. They
will push for the introduction
of halal (clean by Islamic
standards) food, thereby
securing food preparation jobs
for Muslims. They will increase pressure on supermarket chains to feature it on their shelves…along with threats for failure to comply:

At this point, they will work
to get the ruling government
to allow them to rule
themselves under Sharia, the
Islamic Law. The ultimate
goal of Islam is to convert
the world, and to establish
Sharia law over the entire
Earth.

When Muslims reach 10%
of the population, they
will increase lawlessness
as a means of complaint
about their conditions. Any
non-Muslim action that
offends Islam will result
in uprisings and threats: